UK manufacturers demand EU referendum be held no later than 2016 to end the uncertainty for business and industry

Chancellor George Osborne is preparing a Treasury study into the tax implications of EU scenarios

British manufacturers are calling for an EU referendum no later than 2016 to head off uncertainty for business and industry.

They say it is not in the UK’s long-term interest to wait until 2017, and that it should take place either next May or in the following Autumn.

The findings of a survey by members of EEF, the manufacturers’ organisation, come as Chancellor George Osborne prepares a Treasury study into the tax implications of EU scenarios.

In addition, accountant BDO has produced a report on the importance of overseas markets for engineering firms.

Terry Scuoler, chief executive of EEF, says: ‘Now a referendum is going to take place, we need to get on with the negotiations and hold the referendum as soon as possible.

‘Business and investors hate uncertainty and the longer this drags on the more damaging it will be.’

The EEF is calling on the Prime Minister to campaign for the UK to remain a leading member of the EU despite a growing number of business leaders who believe an EU exit could be positive and would not harm the UK economically.

EEF emphasises the benefits of continued membership, choosing not to set them out, and said that David Cameron needs to work for reform.

However, most partner countries have their own national agendas.

Osborne is firmly in the EEF camp and is understood to be preparing to revisit similar economic arguments which were used in the battle against Scottish independence.

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The papers which set out the tax implications of a devolved Scotland will be reworked to show a similar impact if Britain separated from the EU.

It is likely to highlight risks related to the pound and increased taxes, even though the UK’s payments to the EU quadrupled to £11.3billion between 2008 and 2014, the equivalent of £179 a head for every man, woman, and child.

Even the Bank of England has begun preparations for a so called ‘Brexit’ – Britain leaving the EU – by assessing the risks, according to plans accidentally emailed to a newspaper last week.

BDO’s report says more than a third of UK-based engineering companies which export generate 80 per cent of their turnover from these overseas markets.

The largest foreign markets for UK manufacturers were western Europe (75 per cent), followed by North America (54 per cent).

The growing success of businesses breaking into China was also illustrated with just under a quarter selling goods there, the third-largest single market for UK firms.

Britain is the tenth-largest goods exporter in the world and the majority of engineers surveyed (78 per cent) believe that it is the quality of UK products that holds the most value overseas.

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UK manufacturers demand EU referendum be held no later than 2016 to end the uncertainty for business and industry